Canadian Natural Resources Ltd., the largest oil and gas producer in the country, reported better than expected earnings in the fourth quarter of 2021 and increased its dividend, as rebounding demand and tight supply continued to propel oil prices.
The Calgary-based company earned $2.53 billion in the quarter ending Dec. 31, up from $749 million a year ago. The results work out to $2.14 per diluted share, up from 63 cents in the last three months of 2020.
Asked if current market conditions have altered the company’s growth ambitions, CEO Tim McKay said during a conference call Thursday that he didn’t anticipate a departure from the spending plans laid out in the 2022 budget in January.
“It’s very much stay the course,” McKay said. “We’re always looking ahead on the market but we came out with what I felt was a very strong budget, one that has near-term growth, as well as a very balanced outlook for long term.
“Being efficient and effective with our drilling program is key and keeping our costs under control.”
CNRL has said it will increase its capital spending budget for 2022 by six per cent to $3.6 billion, compared to $3.4 billion in 2021.
The company said Thursday that it generated around $2.9 billion in free cash flow in the fourth quarter of 2021, largely due to surging oil prices. Benchmark West Texas Intermediate crude (WTI) averaged around US$76.66 per barrel last year, an increase of around 72 per cent from 2020.
The company also increased its quarterly dividend by 28 per cent to 75 cents per share.
Chief financial officer Mark Stainthorpe said Thursday that the company is focused on keeping dividend increases sustainable in the face of market volatility.
“We look at that to make sure that once a dividend is declared, we’re not having to take it back,” Stainthorpe said. “That’s why you see a steady increase, predictable increase year after year.”
During Thursday’s conference call, the company reiterated its previously-stated commitment to using 50 per cent of free cash flow for share buybacks once net debt fell below $15 billion.
As of the end of 2021, the company’s net debt sat around $14 billion. The company has repurchased around $680 million worth of shares so far this year.
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